BUKALAPAK, that is among Indonesia’s oldest e-commece market places, and is also the country’s third largest player in this space, aims to turn profitable by 2017-end, a top executive with the company said, while adding that a potential listing remained part of its long-term plans to raise capital.
These developments come even as several e-commerce players in Southeast Asia’s largest economy’s are battling to survive, amidst a funding crunch, even as the top players, that have larger war chests, continue to engage in price wars, as they target a larger pie from its swelling online shopping market.
Competition is only set to grow as China’s second-largest e-commerce firm JD.com is currently committing capital to expand its business in Indonesia, and earlier this month, one of the country’s leading conglomerates – Salim Group – had announced its e-commerce foray in partnership with South Korea’s Lotte. Global e-commerce major Amazon too is firming up its Southeast Asia expansion plans, and Indonesia is expected to figure prominently here. Besides, Alibaba Group Holding had acquired Lazada last year and the latter has significant presence in Southeast Asia’s largest economy.
A recent report by Techinasia had said that Bukalapak had engaged in merger talks with SoftBank and Sequoia Capital-backed Tokopedia, the country’s largest e-commerce market place, noting that the talks did not progress to both companies reaching a deal.
According to a report Google and Singapore’s Temasek Holdings, Indonesia’s e-commerce market is set to grow to $46 billion in 2025 from just $1.7 billion in 2015, making it the fourth largest market in Asia behind China, India and Japan, even as its internet users more than double to 215 million during this period.
Bukalapak is betting big that its new advertising gimmicks, customer acquisition and possible future partnerships to rake in the moolah. “We are expecting to become profitable by end of 2017.
Our focus now is to ensure that existing products reach as many customers through, our new initiatives viz, our new agent system channel etc. We hope that better advertising and good membership numbers this year will help boost growth”, Bukalapak’s Chief Operating Officer, Willix Halim who had recently joined the company, told this portal.
According to him, the company carried over $4 million worth of daily transactions in the months of December and saw a growth of 3-5x last year. He said that Bukalapak was looking at a growth of 2-3x in the current fiscal, and added that it had 1.3 million sellers currently.
The company is also trying to get more SMEs as vendors and stepping towards shifting from C2C to B2B.
Bukalapak is among the larger C2C e-commerce platforms that focuses on helping small and medium enterprise go online. It is also one of the leading online sellers of handphones, computers, hobbies and collection, camera, male fashion, home appliances and electronics.
The company is backed by KMK, a subsidiary of Indonesia media conglomerate EMTEK, which had invested in it in 2015, and Bukalapak had then said that it would use that financing round to grow the staff, which currently stands at 750, and to increase marketing and brand awareness.
In 2016, there were reports about Bukalapak exploring an IPO, and Halim said a listing was part of its long term plan. If Bukalapak were to go down this route, it will be the first tech based company to come out with an IPO.
“We need to come out with IPO in the right place and at the right time. If valuation makes sense, we will look at an IPO. If the matrix is according to our plan, then we will go ahead with this.”, he added, while also highlighting that the company had not firmed up any definite plans on this as yet.
Bukalapak also recently partnered with the country’s leading ride hailing platform Go-Jek, an indicator that it is open to partnerships with other tech firms.
Halim also said that Bukalapak was open to strategic partnerships with companies if these relationships would help it grow: “We are open to whatever helps us to enter the market more rationally. There is no ego in play in this.It only depends whether Bukalapak after merging could grow the business or not. We will take a decision only if it makes sense that post merging, the company can grow and have a good business”, he added.
Jefrey Joe, co-founder and managing partner at Indonesian VC Alpha-Jwc said that Bukalapak’s fundamentals looked fine. “The Indonesian market has room for few e-commerce players to survive together in the future. Many players today lack focus on product execution and quality. There needs to be a balance between between money, and product quality and execution. Without having this right balance, it will be tough for any one player to sustain for long till the end,” he added